The new head of the mainland's securities regulator believes wealth management products are trash and advises firms not to pick them up.
So say finance industry executives who recently met China Securities Regulatory Commission chairman Xiao Gang, Moneyweek reported yesterday.
Former Bank of China chairman Xiao has kept a low profile since he took up his post last month, merely requesting to see the latest working reports from various departments, the weekly said.
"It seems the approval of new wealth management and innovative financial products has been suspended. His comments confirm our fears," a senior manager at a Beijing-based fund management company told the magazine.
Others interpreted Xiao's comments as "conservative" and seem to discourage creativity.
Since March 17, Xiao has approved the setting up of just one unit of a fund house. A manager at a brokerage expects the regulator to continue to encourage product innovation but raise requirements.
Xiao is expected to be different from his predecessor Guo Shuqing, who was known as a reformer and someone who encouraged innovation in the mainland's financial industry.
"Xiao is expected to focus more on risk management," the weekly said.